A Queensland man has received a $10,000 cash payout through a junk insurance refund he had no idea he was eligible for.
Following a banking royal commission finding in 2019, financial institutions were ordered to set aside $10 billion to refund people who had purchased junk insurance.
WATCH THE VIDEO ABOVE: Millions of Australians owed a share of $1.6 billion over junk insurance.
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Junk insurance refers to coverage that is either unnecessary or worthless.
However, train driver Paul had no idea he had been paying insurance on his Commonwealth bank card that he didn’t need until he was alerted through a news story.
“I had a look at my credit card statement and saw that I had been paying for the insurance, so I had a bit of a look online and sent through an application for a refund,” he told 7NEWS.com.au.
Paul explained he made an inquiry through Claimo, a service that helps consumers find and process refunds by launching an investigation on their behalf.
A few weeks later while Paul was away enjoying a holiday, Claimo had processed his refund application.
Paul says he was ecstatic to come home to the news he was owed a $10,000 refund.
“It was a nice stress-free process and because I work shift work I didn’t have much time to spare, but I just sent through the information and bang I got the refund,” he said.
Paul says he is saving the refund towards a deposit for a home loan.
“So that was very exciting, and a nice little boost towards buying a home,” he said.
Meanwhile, the Australian Securities and Investments Commission says remediation is still available for millions of Australians for “fees for no service misconduct or non-compliant advice” as well as ” junk insurance” cashback payments.
A 2019 report from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry revealed millions of people had been duped into buying junk insurance.
New ASIC data released in September 2022 estimates a further $1.6 billion is yet to be paid to about 2.7 million consumers for remediation for both junk insurance and non-compliant advice.
“Our guidance puts the onus on industry to get on with fair and timely remediations – returning the money they owe to wronged consumers,” ASIC deputy chair Karen Chester said.
“To date, ASIC has needed to oversee large-scale remediations, to ensure affected consumers were treated fairly and received the compensation they were entitled to.”
Claimo CEO Nathan Mortlock said the most common reason people bought junk insurance was because they were told it was necessary.
“A lot of the time they were told they had to have that insurance to get that home loan back in the ‘90s and also the ‘00s, and we know that’s actually not the case,” he said.
How to claim
Australians are urged to keep an eye out for any correspondence from their banks, super funds, or any other financial institutions for more information about ongoing remediation programs.
Those who are unsure about any fees are urged to contact the financial institution which charged them to find out if they have been incorrectly charged.
For those customers who had policies with Freedom Insurance, there is a specific call to action. Anyone who has been with the insurance company at any time between 2010 and 2018 is urged to come forward to see if they are eligible for a refund.
More details about the refund can be found on the ASIC website here.